I’m late, I’m late for a very important date! Seriously, April 10 was Pay Equity Day. While I did write about why you shouldn’t ask about salary history here, we really need to take another look at pay equity–and not just the federal Equal Pay Act, either. Most states also have pay equity laws of some sort, so this week, we’re going to have a look at what most states in general and some states specifically have to say on the matter. 50 lashes with a wet noodle for me for not doing it sooner. (See what I did there, 50 lashes, 50 states?) Now let’s have a look…
(image from equalpaytoday.org)
Let’s start with the big picture. As I said, almost every state has some type of pay equity law. Most of them discuss pay equity in terms of gender. In other words you have to pay men and women equally for the same or substantially the same work.
New Jersey, Iowa, Ohio, California and Oregon’s laws also prohibit pay disparities among racial or ethnic groups. (Oregon’s law will take effect in January 2019. New Jersey’s will go into effect on July 1.)
Maryland’s law requires equal pay for men and women and discusses gender identity.
Louisiana and Texas impose pay equity requirements on public employers only.
The District of Columbia, North Carolina, Wisconsin and South Carolina, while they do not have specific pay equity laws, have general employment discrimination laws that prohibit wage discrimination.
Alabama, Mississippi and Utah have no pay equity laws or specific requirements for equal pay or prohibitions against pay discrimination.
Now, if you will indulge me I am going to focus on the law just passed by New Jersey, because, aside from it being my home state, it is the most sweeping of all the pay equity laws. Here it is:
New Jersey’s law amends the New Jersey Law Against Discrimination (NJLAD) to prohibit employers from paying less (or giving less in benefits) to those classes of people protected under the LAD than to those who are not protected for“substantially similar work, when viewed as a composite of skill, effort and responsibility.” (Protected classes include without limitation, race, religion, sex, marital status, disability, gender identity and national origin). You can already see that NJ is reaching beyond the gender pay gap by including all other protected classes.
These prohibitions, however are not the most striking feature of this new law. The consequences for anyone found in violation are what makes this law stand out. First, the employer will have the burden of proving that any difference is based either on a bona fide seniority system, merit pay, or another legitimate, n0n-discriminatory reason. Employers must compare wages and benefits across all of their operations or facilities to determine if there is a differential. (We do not yet know if that includes out-of-state locations.) As with the federal EPA, each paycheck resets the statute of limitations (time limit for filing a charge or lawsuit), but, whereas the federal EPA allows an employee to seek back pay for up to two years prior to the date of the charge/lawsuit, the NJ version allows employees to seek up to six years back pay. Yes, you read that right.
As you probably guessed, there’s more. The law mandates treble damages to any employee who proves a violation. Yep. The employee gets three times the disparity. These rights cannot be waived or curtailed. In other words, written, signed agreements by the employee to waive these protections or shorten the six-year statute of limitations are not enforceable. (We do not yet know what impact this law will have on agreements to submit employment disputes to binding arbitration. I’m sure that will come up eventually, so stay tuned.) Anti-retaliation provisions protect employees from adverse action if they discuss their pay with others, including legal counsel or government agencies. Finally, if you do business with the State of New Jersey, you will have to start providing compensation information, broken down by race, gender and ethnicity.
Again, the New Jersey law is, at present, the most sweeping, but it may be indicative of the general direction of things, so don’t dismiss it if you don’t have employees in New Jersey. In any case, regardless of what state(s) your employees work in, here’s what you do need to do:
- Check the anti-discrimination and/or pay equity laws of each state where your employees are working, not just the state in which your company headquarters are located. If you have employees working from home, include those states as well;
- Review your compensation practices regularly (ideally at least twice a year). The longer you wait in between reviews, the more likely for patterns and problems to accumulate. The more often you review, the sooner you can correct potential problems.
- If you do notice differences, either correct them or be ready to explain any justifiable differences and provide supporting documentation.
- Train your H.R. staff and supervisors on the key provisions of any pay equity laws.
Yes, I know these points can apply to other employment laws as well, but does that make them any less relevant here? (I think you know the answer). See you next week.
OK, I think you get the point. See you next week.
Contents of this post are for educational/informational purposes only, are not legal advice, and do not create an attorney-client relationship. Consult with competent employment counsel in the state(s) in which you employ people with your specific questions.
Before choosing an attorney, you should give this matter careful thought. The selection of an attorney is an important decision. If you find this communication to be inaccurate or misleading, you may report it to the Committee on Attorney Advertising Hughes Justice Complex, CN 037, Trenton, NJ